Indonesia has circulated a draft decree seeking comments on imposing a ban on export of coal below 5,100 gross kcal per kg from 2014. Earlier, Jakarta brought in regulations that calÂled for all coal exports to be benchmarked to international prices. The regulation also set aside all prior agreements and understanding mining companies had entered into.
This put Indian power companies in a quandary as they had bid aggressively for thermal plants here based on their deals in Indonesia. The Indonesian decree would bring down exports by 120-130 million tonne if implemented and India would have to bear the brunt of the scarcity. Indonesia exported 270 million tonne in 2010.
India imports coal grades from 5,000 kcal/kg to as low as 3,500 kcal/kg from Indonesia. As Indonesia wants about 82 million tonne, or one-fourth of the production, in the country for its own plants in 2012, such a move will cap exports to ensure a greater availability for domestic consumption. This fiscal, over 110 million tonne needs to be imported to meet the requirement.